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Colin Hill | 17 Jul 2018 | Advice

Moving On: What You Need to Consider When Looking to Buy a New House

Colin Hill | 17 Jul 2018 | Advice

Moving On: What You Need to Consider When Looking to Buy a New House

Moving On: What You Need to Consider When Looking to Buy a New House

Chances are unless you found your dream home the first time around, you will eventually look to move on from your current house. There are countless reasons why we choose to move houses. Whether we are looking to upsize, our family’s growing or simply after a change of scenery. The reasons will vary for everyone.

However, looking to move on comes with a lot of questions. Should you sell first? What happens if we sell but can’t find the right house? Is there financial help available? It may seem like there are more questions than answers. But, help is out there, so make sure you do your research and seek advice from trusted sources.

Should I buy before selling?

Regardless of the state of the market, for most people, buying a new house before selling their current one is the prefered option. The obvious advantage of buying first is you won’t be in a race against the clock to find a to find a new house.

Basically, you’ll have the luxury of taking your time and finding a house that is right for you. Another advantage is that once you find your dream house, you’ll be able to submit an offer on the condition that you are able to sell your current home.

The benefit of submitting a conditional offer is there is less risk associated with taking on the new houses. As you still have the option to void the sale if you are unable to sell your current house in the determined time frame.

However, submitting a conditional offer comes with its own challenges. A lot of sellers would prefer unconditional offers. In a cooling market, this is less of a factor but when the market is up, sellers generally prefer unconditional offers.

However, make sure you do your market research and set yourself realistic expectation. In the event, you sell your current house, but at a lower price than you expected, you may open yourself up to more debt than you originally anticipated.

Should I sell first?

Compared to buying first, selling your house before purchasing a new one can be fairly risky. However, it isn’t an uncommon practice. If you decide to take this route, make sure you have a backup plan. Just in case you are unable to find your dream home before you hand over the keys.

One of the biggest benefits of selling your house first, especially in a cooling market, is you may be able to reenter the market at a much lower price. If this is the case, you may leave the process in a better financial position then you anticipated.

However, the fact you have a strict move out deadline, means you don’t have time on your side. Thus, if you are unable to find a new house before the handover date, you will need to make other living arrangements. As it’ll be highly unlikely you will be able to push back the handover date.

What is a bridge loan?  

Regardless of what option you take, chances are there will be a certain crossover period, where you will be paying for the mortgage on two houses.

If you find yourself in this situation, ask your lender about a bridge loan. This is a short-term loan which helps people while they are in this crossover stage between buying a new house and selling their old one.

In a market that is up, buyers can use this to make an unconditional offer, instead of a conditional one. This may be the difference between securing your dream home or not, as your offer may be more attractive without any conditions attached.

But remember, taking on a bridge loan requires you to take on two loans at the same time. So you need to be sure you have the finances available to cover this increased financial commitment. On top of this, if you are choosing to buy first, your lender will also require you to sell your current property within a certain time frame.

Every situation is different, which means how you choose to move on from your current house will be different from your neighbours.

A great place to start is to do your research and speak to a trusted and experienced adviser. Our team would be more than happy to help you understand your situation and the best course of action for you. If you would like to organise a meeting, contact us today!




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